Skip to main content
4:00 am
is now the time to bulk up on bonds? in today's cover story, bit by bit, is virutual currency catching on? the real reason why pickup trucks are beginning to rule the road. plus, why eyes are on the skies for an historic flight this week. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's tuesday, may 7th. i'm angela miles. in today's first look: the s&p 500 is at an all-time high. yesterday, the dow lost 5 points. the nasdaq added 14, with momentum from apple, google and microsoft. the s&p set a new record close at 1618. gold and oil had a moderate session.
4:01 am
first solar is enjoying a shining moment. sales at the solar panel company increased 52%, which was above consensus. first solar, however, missed on profits. and electronic arts seals a deal with walt disney to create "star wars" video games. we are taking an early look at the bond market this morning with tony harris of performance trust investment advisors. good to have you on the show this morning. i know it is hard to time the market, tony, but is now the time to be in bonds? - you have had three good developments in bonds: you at least had a big sell-off over the last three days after the payroll report on friday, so the 10-year treasury has actually moved up in yield about 14 basis points from 163 to about 177, so that is good to start with. you've also seen inflation relatively tame. the pce inflator is about 1% year- over-year - that's what the fed
4:02 am
looks at to determine if they are going to act or not act. and then you also had the fed, in the most recent release of their minutes, basically say that they are not just talking about tempering their bond purchases anymore, they are talking about potentially increasing their bond purchases if the slowdown in the u.s. economy continues. - tony, what do you think about this chatter of bonds being overpriced and the bond bubble? - i think there is no question that yields on bonds are very, very low right now, historically. but there is very good reason for that: obviously, we have a federal reserve that is committed to buying $85 billion worth of mortgage-backed securities as well as treasuries per month, so that is sucking a lot of supply out of the market. you just don't have very many places to go to get additional yield. so i think, you know, you hear about the great rotation, and maybe you might have some people moving out of bonds and into equities, but we're looking at the flow of funds data, and we're actually not seeing the mutual fund investors moving out of bonds into equities yet,
4:03 am
and we are actually not even seeing that many inflows to equities as of now. - interesting. good to have you on the show this morning. tony harris. thank you, tony. - okay, thank you, angie. the senate approved allowing states to collect taxes from online sales. the bill now goes to the house, and there are a couple of numbers that make this debate a big deal. the first one - online shopping is a $226-billion-a-year business. the second - applying a sales tax to all those transactions could add $12 billion in revenue to state governments. but opponents see it as another tax. "in my judgment, we should not be taxing the internet. period." "so i think this is an important measure in terms of leveling the playing field for retailers across america, and it's long overdue." retailers with less than a million dollars in sales would be exempt from collecting sales tax. new york's attorney general is accusing two banks of breaking the rules. according to the lawsuit, bank of america and wells fargo failed to respond
4:04 am
in a timely manner to customers who needed loan modifications, increasing odds of foreclosure. the banks signed a $25-billion national mortgage settlement deal last year aimed at assisting struggling homeowners. the ag says there are 339 complaints. both banks are addressing the issue. shares of bank of america jumped 3% and mbia stock surged 45% after bac agreed to pay $1.7 billion for mbia's losses from countrywide. may 21st marks a critical day for jamie dimon. shareholders will vote on whether to strip jamie dimon of his chairman title. dimon has held both chairman and ceo titles since 2006. due to the bank's massive trading debacle last year, some parties have pushed for an independent chairman. jp morgan said it endorses dimon. billionaire warren buffett also offered his support for dimon this week. health insurance company cigna is setting up health exchanges in 5 states ahead of the
4:05 am
requirements under health care reform. starting october 1st, cigna will sell health insurance in arizona, colorado, florida, tennessee and texas. next year, under the affordable care act, all states will be required to sell healthcare through exchnages so americans have competitive choices. cigna's ceo tells reuters setting up the exchanges won't likely be a top- or bottom-line driver. meals on wheels is facing a crisis. the government-funded program, which sends meals and company to about 25 million americans, will encounter a budget drop. sequester cuts have reduced meals' budget by about $38 million. the white house estimates 4 million fewer meals will be delivered. the organization itself estimates about 19 million will be affected. it's not just college tuition that is going up. financial aid is at record levels as well. the average amount of financial aid offered by private colleges hit a record high of 45% last fall. additionally, 65% of schools increased discount rates. the wall street journal
4:06 am
reports that after years of persistent tuition hikes, private colleges fear pricing out of the market. it was only a matter of time - the cyber-currency known as the bitcoin now has federal regulators mulling over whether it should be regulated in some way. our cover story takes a look at how the bit became the "it" currency. the commodity futures trading commission is seriously looking at whether the four-year-old online currency phenomenon bitcoin should be regulated. supporters say one of its attractions is that it isn't regulated. "what bitcoin does is enables global gtrade as it has never been before." one cftc commissioner, bart chilton, told the financial times "we're talking about a type of shadow currency" in which "real people can have real risk in these instruments." bitcoin backers say it makes global online purchases simpler. its value is principally in the online world of e-commerce. "ultimately, exchanging currencies is inefficient.
4:07 am
bitcoin is one answer, but i don't think a lot of people are going to get rich on it." but zach harvey and his brother josh of manchester, new hampshire, are so convinced that bitcoin may become a crossover currency that at "bitcoin 2013," a conference later this month in san jose, they plan to showcase at atm for bitcoin. "there are really exciting businesses based on this. 'coinbase' conducts 15 million dollars' worth of transactions a month. it used to do a million a month. that gives you an idea of the growth of bitcoin." however, regulatory agencies appear to be closing in. in march, the treasury department concluded all firms that
4:08 am
exchange or transfer virtual currency must report to the government and have policies to prevent money laundering. "the same people who want a decentralized internet currency now want a regulated, centralized currency. ultimately, that will be bitcoin's downfall, because you cannot have a decentralized, legal system of currency." as with many things in the virtual world, hacking into accounts is a concern, largely because the value of bitcoin has gone up exponentially. traded in 2010 at 3/10 of a cent, a single bitcoin is now valued at more than a hundred dollars. details about job cuts could be revealed in bmc software's earnings report after the close. bmc was just acquired for $6.9 billion by a group of private investors including bain capital and golden gate capital. the software company was sold for $46.25 per share. bmc has struggled against its competitors ibm and hewlett packard. last summer, the elliott management hedge fund pushed for the company to take action. bmc warned last month staff cuts were ahead. san francisco's city attorney takes on monster beverages. in
4:09 am
the lawsuit against the company filed yesterday, dennis herrera says monster is "unique" among energy drink makers in its aggressive marketing to young children. monster contends the city attorney "overstepped his authority" in trying to force the company to curb its marketing. the fda is placing a new hepatits c treatment by abbvie on the fast track. the drug- maker says the potential breakthrough cure is showing promise. the drug is in the third phase of clinical trial. currently there is no vaccine for hepatitis c. it pays to win, especially if you're involved with the bernie madoff case. lawyers and consultants have made an estimated $701 million off of the case. legal teams are still attempting to uncover over $17 billion lost throughout the massive ponzi scheme. most of the legal fees were paid to a single firm, while about $300 million went to dozens of other law firms. yum! brands is on the defense following a meat scandal in china. the owner of kfc and pizza hut says there is no evidence that meat for its little sheep chain was contaminated. concerns arose regarding the chain's mutton
4:10 am
after police arrested 900 people accused of selling rat meat as lamb. yum! says it will verify the safety of the meat "in an abundance of caution." the chain has taken a sales hit after a recent chicken contamination scandal and an outbreak of bird flu. wal-mart reclaims the number one spot on fortune 500's ranking of largest u.s. companies. the list ranks companies by revenue, and wal- mart has been battling it out with exxon mobil for the top spot. chevron, phillips 66 and berkshire hathaway rounded out the top five. facebook made it onto the list for the first time. the government continues to exit its position in general motors. at last check, the goverment has recovered more than $30 billion of its $49- billion bailout of gm. last month, the treasury department sold 58 million shares, with the stock trading just below $30. the treasury plans to gradually sell its remaining 240 million shares over the next year to 15 months.
4:11 am
the solar impulse, a featherweight solar-powered airplane, took off yesterday in an attempt to fly across the country. this is not the first solar-powered plane to fly, but it is the first to fly at night. the craft is powered by nearly 12,000 photovoltaic cells that charge its batteries and allow for night flight. still to come, are we entering a new age of gas guzzlers? that's later on. but first, it's what you say and how you say it. tips to craft your first impression to get hired, next with bill moller.
4:12 am
4:13 am
4:14 am
7,000 high-school students drop out every school day. let's catch them before it's too late. to start helping students in your community, visit alright, i have 1 minute - give me your best pitch. whether selling yourself to get a new job or selling your business to get a new customer, you have to impress, and you've gotta do it quickly. whether it's on linkedin or in person, you've got to hook them with a compelling restatement about the essence of you. it's what's called, of course, the elevator pitch. marilyn bird is district president for robert half international, the world's oldest and largest staffing firm. so, it's sort of what you are saying and how you say it that matters.
4:15 am
- absolutely. you only get so much time, and you want to make your point clear, but you also want to make it enthusiastic and sincere. - other than sincerity and enthusiasm, what are the elements that need to be in a good, quality elevator pitch? - what you are looking for, why you are looking for it, and any special skills that make you stand out, make you unique. - all right marilyn. you tell me what's unique about you. i'm thinking about hiring you. - all right. whenever i meet people, i usually say, i am 14 years in the staffing business. i put people to work in america. that's what's unique about me. - that's a good hook. should people try to figure out some kind of a clever hook? - i don't think you want to be too clever. i would advise against a gimmick. it's not to sell, it's not to be peculiar. it's actually to be sincere. actually demonstrate who you really are, but show your personality. be yourself. - so, should you write this out and then practice it? - i think you should. i really do. i think there would be a lot of value in maybe breaking it down. what do i want? why do i want it? what's unique about
4:16 am
me? and i think i would probably prepare a couple of different pitches depending on time, setting, and who i'm dealing with. - a lot of people would say, "ok, i should say something compelling. i just don't think there's anything compelling about my story." - i don't think you should get caught up in that. everybody is unique. if you really hone in and practice on "what am i looking for? why do i want that?" and then think about "how can i convey my personality in the most sincere form?," you will be compelling, you will be you. i think that's what people want to see. - you know, marilyn, you can use these in, i think, all kinds of social settings, too. - i totally agree. i totally agree. in the elevator pitch, in an interview, when you are networking, when you meet new people. heck, to make your friends you could use an elevator pitch. - all right, i will work on mine. marilyn bird from robert half, thanks so much. - thank you. still ahead, what the uptick in pickups says about the economy. that's next.
4:17 am
4:18 am
4:19 am
4:20 am
4:21 am
trucks have gone amuck. we recently reported on the hot pace of u.s. truck sales. jim bell, head of consumer affairs at general motors, joins us this morning to take us behind the scenes. jim, nice to have you here. why are trucks such hot sellers even with high gas prices? - if you think about a pickup truck buyer a couple years ago, or a decade ago, it was more of a, i don't know, a fashion statement. it was a wardrobe statement. you had a pickup truck for your weekend activities, and then a car for the rest of the week, and you kind of mixed it up. but people who treated their trucks like that really got burned when it
4:22 am
came to fuel price hikes, as you said. so we have worked really hard at gm to increase and better the fuel economy on all of our trucks. we've done that in three different ways: number one, better aerodynamics. we learned a lot from the chevrolet volt as to how to make a car slide through the air. obviously, if it is slippery, then it doesn't need as much energy to push it forward. we also lightened the vehicle. a lot of use of high-strength steels and composites and aluminums to make the car as light as possible. and then lastly, we have an all-new line of engines called ecotech 3, that for the first time incorporates three technologies that you normally don't see all in one place, especially in pickup trucks. - what do truck sales say about the overall health of the economy? - i think it says something very, very positive, because it means that small business owners and people who use vehicles like this to move their toys or use it in a workplace environment, they are feeling confident. they are able to look
4:23 am
at their old business finances or their household finances and say, "we are ready to reinvest, we are ready to get back in this business." maybe they have been putting off- it's time for another set of tires or breaks on their old truck, and they feel confident enough to go into it. secondly, it means that the banks are lending again. that is a big part of this. so, not only is there pent-up interest and demand from consumers, but the banks are there to help. - what are some areas of persistent weakness for gm? - i would think it is just some of the things we encountered during our bankruptcy process have slowed down some of the development and put some things kind of on ice while we went through that process. now that we are free and clear of that, i think it is pedal to the metal, so i think you are really going to see this new product really start to accelerate. we are going to be making our competitors move much faster than they want to. - thanks jim. that's jim bell of gm. - my pleasure. sprint will thank you still ahead, google, microsoft and apple are tech stocks on fire. coming up in chart talk, what the options market is indicating for future moves. we'll be right back.
4:24 am
4:25 am
4:26 am
4:27 am
i have been looking forward to this chart talk. we have mark sebastian of option pit mentoring talking about those hig, hot stocks - google, apple, and microsoft. good morning to you. - good morning. - are there indications these stocks will continue to run? - i think so, and i think the relationship to the ndx is really the important thing, the nasdaq 100. through the first quarter, if you look at the ndx, the ndx was by far the major underperformer relative to the spx, the s&p 500, and the dow jones industrial average. why? well, we had apple falling, microsoft faltering, and google rallying. now what are we seeing? we are seeing apple, google, and microsoft, the three biggest parts of the index, about 20% the index,
4:28 am
rallying all in unison. i think that points toward techs really possibly being a big leader into the end of the second quarter, and the nasdaq maybe being the top performer of the three major indices. - mark, what signs are you seeing in the options market this will continue? - we have seen some of the volatility in ndx start to catch a little bit of a bid here. meanwhile, the s&ps seem to be really falling. so, there has been a major flip in volatilities between s&p and nasdaq, where nasdaq is trading at a relatively sizable premium to s&p 500 volatility, the likes of which we haven't seen since probably before the flash crash, and coming out of the financial crisis of '08. - googol crossed a record high yesterday. is this a stock you would buy at these levels, though? it seems a little risky here, mark. - you know what, you think, but, typically stocks at their highs go higher. and we're not seeing that crazy kind of
4:29 am
euphoric volatility in the options. believe it or not, the implied volatility in the options is relatively low. when apple was topping out, we saw the volatility curve flip, where calls were actually more expensive than puts. this is something you see in really expensive stocks as they start to peter out on a rally. we are not seeing any sign of that. - thank you mark. - thank you. that's it for now. join us tomorrow. a couple of our pro traders will be here with their views on what's ahead for the stock market. it's worth hearing - they both predicted months ago the s&p would cross 1,600. is 1,700 next? from all of us at first business, thank you for watching, and have a great tuesday.
4:30 am
>> announcer: the following is a paid presentation for 10 minute trainer, brought to you by beachbody. >> hi, i'm mark steines, coming to you from hollywood, california. we would all love to lose weight and get in shape, right? but the problem we have is time. look, i had all the excuses in the world: i was too busy, i was too tired, not enough time... that is, until i discovered 10 minute trainer. that's right, 10 minutes. look, i'll be very honest with you. i was skeptical at first, and then i heard it was developed by fitness trainer tony horton-- he's the guy behind p90x.

First Business
KICU May 7, 2013 4:00am-4:31am PDT

News/Business. Angie Miles. (2013) New. (CC) (Stereo)

TOPIC FREQUENCY S&p 6, America 4, Marilyn 4, Bmc 3, Gm 3, Google 3, U.s. 3, Us 3, Cigna 3, Dimon 3, Apple 2, Jamie Dimon 2, Tony Harris 2, Bitcoin 2, San Francisco 1, Berkshire Hathaway 1, San Jose 1, Manchester 1, New Hampshire 1, Jim Bell 1
Network KICU
Duration 00:31:00
Rating G
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Channel 19
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 704
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color

disc Borrow a DVD of this show
info Stream Only
Uploaded by
TV Archive
on 5/7/2013